Procedure For e-filing Of TDS Returns

1. Objective:
The basic objectives of computerization of TDS returns is to cut down the compliance cost for deductors, to correlate deduction of taxes made by deductors with the deposit of the deducted tax in the Government account in a designated bank/and correlate deduction of tax by the deductors with the corresponding credits claimed by the deductees.
In phase-I of TIN it is proposed to receive the electronic TDS returns of corporate deductors and to digitise the paper TDS returns of other deductors. In Phase-II of TIN the work relating to dematerialization of TDS certificates will be taken up so that cross verification of deduction by the Deductors with the claims of deductees can be carried out.

2. Scheme for Electronic Filing of TDS returns:
The scheme for electronic filing of TDS returns was notified on 26.8.2003. The Board Circular No.8 dated 19.9.2003 clarifies the procedure in this regard. The procedure basically envisages that corporate deductors will prepare their TDS returns in the new TDS return Forms 24, 26 or 27, according to the data structure notified by e-Filing Administrator. The e-TDS returns in the prescribed data structure stored on CD ROM and supported by a duly signed control chart in Form 27A in paper format will be submitted to an e-TDS Intermediary appointed by the Board .

3. e -TDS Administrator and e-TDS Intermediary:
The CBDT has appointed Director General of Income-tax (Systems) as e-TDS Administrator. Separately, M/s National Securities Depository Limited (NSDL), who are also the agency hosting TIN, have been appointed as e-TDS Intermediary. During the current financial year, NSDL will be opening their front offices at 41 stations throughout the country, for receiving e-TDS returns of all deductors. NSDL w.e.f. 19.01.2004 will set up their front offices called as ‘TIN Facilitation Centre’ at 41 stations throughout the country, for receiving e-TDS returns w.e.f. 19.01.2004. NSDL will set up their front offices at 65 stations more during the next financial year so that they will have presence at all stations where administrative CsIT are located.

4. Procedure for allotment of TAN:
4.1 All deductors required to e-file their TDS returns have to quote their reformatted Tax Deduction Account Numbers (TAN) in their respective TDS returns. A large number of deductors have already obtained these re -formatted TANs which are unique countrywide. Wherever TAN has not been allotted or old TANs have not been reformatted, applications in Form 49B can be filed with NSDL. All old applications for allotment of new TAN/ reformatted TAN pending in the Department, will be disposed at the earliest
.
4.2 NSDL has also been authorised to receive applications (form 49B)for allotment of TAN at their front offices for fee of Rs.50/- to be paid by the applicant to them. The data in respect of such TAN applications will be entered by NSDL and sent to National Computer Centre (NCC) of Income-tax Department and the respective computer centres on-line . The allotment of TAN will be done by the IT department centres and communicated online to NSDL who will intimate the same to the applicant.

5. Preparation of e -TDS return:
5.1 New forms of TDS return in Form No.24, 26, & 27 (enclosed herewith), a control chart in Form 27A have been notified by the Board vide notification dated 31.7.2003 consequent upon amendment to Rule 30 of IT Rules, 1962. The e-TDS returns have to be prepared in these new forms and according to the data structure prescribed by e-TDS administrator. This is necessary so that the data structure of e-TDS returns is compatible with the departmental application software for processing the same.

5.2 The prescribed data structure can be downloaded from this websit es as also of NSDL (http://tin.nsdl.com) This can also be obtained from the front offices of NSDL. While preparing the e-TDS returns, the deductor has to ensure that following mandatory requirements listed in Circular No.8 of CBDT dated 19.9.2003, are complied with :
       (i) Tax deduction Account Number (TAN) of the deductor is clearly mentioned in            the TDS return as also on Form No.27A, as required by sub-section (2) of            section 203A of the Income-tax Act. However, in cases where TAN is not            available the e-TDS returns will also be accepted if the same is accompanied            with an application in Form 49B for allotment or for reformatting.
       (ii) Full particulars relating to deposit of tax deducted at source, in the designated             bank are correctly and properly filled in the table at item No.6 of Form No.24             or item No.5 of Form No.26 or item No.5 of Form No.27, as the case may be.
       (iii) The data in the e-TDS return is as per the data structure prescribed by the             e- Filing Administrator.
       (iv)The Control Chart in Form 27A is duly filled in all columns, signed and enclosed             in paper form with the return on computer media.
        (v) The Control Totals of the amount paid and the tax deducted at source as             mentioned at item No.3 of Form No. 27A tally with the corresponding totals in             the  e-TDS return in Form No. 24 or Form No. 26 or Form No. 27, as the case             may be.

In case any of these mandatory requirements are not fulfilled, the e -TDS return will not be received by the e -TDS intermediary.

5.3 The deductors should prepare their e-TDS return as per the above procedure, store the data on a CD ROM, enclose the control chart (Form 27A in paper format) and submit these at any of the front offices of NSDL. Although the scheme permits e-TDS returns to be prepared on a floppy, it would be preferable that these are prepared on a CD ROM to avoid any loss of data, viruses etc.

6. Filing of e-TDS returns:
6.1 The e-TDS return can be filed at any of the front offices being opened by NSDL at 41 cities. At the receipt stage, these front offices will carryout validation checks on the e-TDS returns to ensure compliance with above five parameters, and a provisional receiopt will be issued on successful validation.

6.2 Section 139A(5 B) requires that PAN of the deductees should be mentioned in the TDS returns. Wherever PAN of deductees is not mentioned by a deductor in his e-TDS return, this fact will be recorded on the provisional receipt as deficiency, to be removed by the deductor. However, in such cases, NSDL will accept the e -TDS returns. The deficiency can be removed by the deductor within 7 days, failing which the e-TDS returns will be sent by NSDL to the Department indicating the deficiency therein for appropriate action by the concerned A.O.

7. Upload Charges: Since e-filing of TDS returns will reduce the voluminous paper work involved in filing of paper TDS returns and enclosures thereby significantly reducing the compliance cost of deductors, the e -intermediary i.e. NSDL have been authorised to collect service charges in respect of the various services being rendered by them to the deductors for upload of e-TDS returns at the following rates:

 

Service tax if any will be payable by deductors in addition to the above.

8. Transmission of data pertaining to e-TDS returns and Form 27A to the A.O.: 8.1 The computerized data of e-TDS returns in the prescribed data structure will be transmitted by NSDL to the National Computer Centre of Income Tax Department online and will become available to the concerned TDS Assessing Officers (A.O) on the network. This will obviate requirement of data entry for e- TDS returns by the Assessing Officers (A.O).

8.2 The paper Form 27A, CD/floppies and supporting documents if any, will be arranged by NSDL A.O.-wise and sent to the Nodal Officers appointed at each of the 41 cities. The concerned Chief Commissioner of Income tax should appoint one officer not below the rank of Administrative Officer/ ITO as TDS Nodal Officer. Each batch of Form 27A, CD/floppies and supporting documents if any, will be accompanied by a list (giving TAN, name of Deductor, date of filing and Form No. of the TDS return) in triplicate. Two copies of the list would be given to the Nodal Officer, who will send the Forms 27A and supporting documents and CDs along with one copy of the list to the concerned TDS A.O. in a timely and proper manner. Thus one copy of list will be retained by each of the Front Office and Nodal Office and the third copy goes to the concerned TDS A.O.

9. Procedure relating to processing of paper TDS returns:
9.1 The TDS returns for F.Y. 2002-03 already filed in old TDS return forms on paper will be processed manually by the respective TDS A.Os., as per the earlier procedure.

9.2 The TDS returns in new Form 24, 26, 27 filed during the current financial year in paper format by non corporate deductors will also be sent to the front offices of NSDL at the respective cities for digitisation i.e. data entry by NSDL by the department.

10. Computerised processing of TDS Returns:
10.1 NSDL will computerise the data whether on e-TDS returns or on paper TDS returns sent to them for digitisation. They will link TAN clubbed with the TDS returns wherever Form 49B has been filed with the TDS return s. They will also match the data in respect of deposit of TDS in banks as mentioned in the TDS returns vis-à-vis the information available from banks in the Tax Accounting System (TAS). The computerised data of TDS return s, mis-match report of deposit of TDS, particulars of missing PANs of deductees etc., will be transmitted by NSDL online to Income tax Department.